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Long Term Perspectives
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Long Term Perspectives

by The MoleJune 20, 2017

How far we have come over the past few years whilst getting absolutely nowhere. I mused just yesterday that it feels like as if we are living in one giant economic, cultural, and social bubble in dire need of a needle. Everywhere I look I see nothing but rapid inflation and boundless exuberance. What once may have been a slow and barely perceivable progression into an utopian brave new world, where nothing matters and everything carries a price tag, has at this point become utterly pervasive and is now rapidly making its way into all aspects of our personal and professional lives. But the most recent and increasingly bothersome symptom of what I deem to be a de facto generational social disease is the firehose coverage of daily drama dished out across various social media watering holes. 

The slow demise of the main stream media over the past decade implicitly resulted in the death of objective and common sense journalism. Taken its place increasingly are corporate clickbait farms which scour the planet for any scandalous or shocking material that can be turned into a juicy headline. The more outrageous the better and it’s not like they are about to let truth and objectivity get in the way of generating a few more percentage points on their traffic stats. Looking at a newspaper or even online post from just a decade ago feels like I have traveled back in time a century or two when substance and objectivity still were at least virtues worthy living up to. I can literally see you smile cynically whilst reading that sentence.

Now the reason why I’m bringing all this up here on a trading blog is because the financial media and its social media pertinent contenders are following in the same footsteps. On Quantopian the other day I looked at some algos that allowed quants to use social media sentiment for their stock rebalancing. The basic idea has merit but a few quick backtests suggested that these signal algos probably need a bit more work. Which casts doubt on whether all that daily drama can even be harnessed to produce a minimal edge. In the meantime the onslaught continues and I can’t pop up my twitter feed without taking a double dose of anti-depressants. At minimum can we at least agree on ditching the frivolous use of upper cases? Just because you’re shouting doesn’t mean your post has any value. If it did I’d obviously be posting in upper case all the time  

I can only guess where this is all heading and don’t want to ruin  your late spring day with pessimistic visions of the future as you’re getting more than enough of that already. But the word unsustainability does seem to be popping in my head on an almost daily basis. Call me a contrarian or just plain old stubborn, but when I see everyone run in the same direction whilst apparently getting poorer and more miserable then I have a tendency to look the other way for an emergency exit.

Alright now on to our regularly scheduled programming, I promised you long term perspectives:

2017-06-20_gold_LT

Let’s start with precious metals. I have been patiently following gold’s recent slide with much interest, waiting for the right moment to strike. We’re getting closer but what I need to see is a drop into 1233.6 followed by a convincing long pattern on the short term panels. Long term this chart has to potential paths – and obviously this is not a prediction. The odds support a drive higher and an eventual LT trend change. But if it drops through its recent monthly lows near 1133 then I expect a drop toward the 1k mark.

2017-06-20_silver_LT

Silver looking very bullish on a long term basis. Just look at those formations which suggest a LT floor pattern is in the making. However like with gold there is still a very real possibility that it’ll stagger and fall much lower, perhaps even into single digits. The good news – like in gold we should know this summer which way we’re heading.

2017-06-20_crude_LT

Crude once again has become suicidal and is now approaching its lower 100-week Bollinger. Which isn’t exactly the old Berlin wall or anything and a cross over is possible. However if it manages to stabilize then we may start looking at short term entry setups. Don’t worry, as always the Mole will be on the case and as soon as something plausible turns up I’ll let you know.

2017-06-20_ZB_LT

Bonds continue to whipsaw their way higher, somewhat mirroring the monthly panel. The new upside trend is just now starting to gain more credibility and I in particular like the massive cluster of Net-Lines that has been accumulating below. Quite some valuable context and if bonds revert back lower I’d be very much looking for long entry opportunities. But all good things take time, patience is key.

2017-06-20_EURUSD_LT

On the forex front the EUR/USD has dropping a tiny bit which helps a little at the ATM. But on the LT front the weekly panel in particular is still looking pretty bullish. That’s quite a Bollinger compression we have here and if it this one resolves higher than it could get expensive for me over here in Europe. In the interim playing the swings seems to be the most productive approach.

2017-06-20_AUDUSD_LT

The AUD/USD is also pretty coiled up after two years of sideways churn. Although the pattern is supposed to be bearish I have doubts as to whether this one will resolve downwards. We seem to be making higher lows and the 100-week SMA is about to turn up. Worth watching only for now IMO as it’s tough to get involved at this stage. Perhaps on another drop to the green support line. Of course if you’re bearish then now is a great spot to be short.

Speaking of currencies, here’s a juicy potential setup for my intrepid subs:

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About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • ridingwaves

    IBB joined XBI in sector breakout…..

  • Tomcat

    I am more “optimistic” than you on GOLD. Looking to enter 1225, but will to split the difference say 1229?

  • Tomcat

    Covering my copper to make room for that 1229 GOLDen entry.

  • http://evilspeculator.com Sir Mole III

    snort

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    I went long an oil position Friday afternoon, AAAAaaaaand. Boom.
    it’s gone.

    It’s a Dystopian world, where even the robots will feed on each other.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://evilspeculator.com Sir Mole III

    Gold gerbs shouldn’t crawl around in oil fields, don’t you know better?

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • ridingwaves

    sure hope some of you joined this ride….not over yet…..this is the sector to be in for the final melt up

  • http://evilspeculator.com Sir Mole III

    I’ll take a look.

  • ridingwaves
  • ridingwaves

    if $USD doesn’t get over that 97.77 area and close above the 5-30 candle, this might be it for gold down move…

  • Tomcat

    Actually, rates are a better predictor of where GOLD will be heading having significantly higher correlation than the Dollar.

  • ridingwaves

    DCTH is going nuts today, 300 million volume, .19c stock….
    crazy moves on bio symbols all over the place….

  • ridingwaves

    so with rates heading down, gold up or down?

  • Tomcat

    Rhetorical?

  • Tomcat

    Needs to come down more, low 42s for me to start building position. Contango is being re-established. Unfortunately the curve needs to flatten further for shale to run out of business. It will happen, but not as fast as I had anticipated. Then we can oil with 60+ handle.

  • ridingwaves

    do you have a chart with comparison or correlation?

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    Certainly. $41 was talked about 3 weeks ago.
    https://disqus.com/home/discussion/evilspeculator/tuesday_mission_briefing/#comment-3331631540

    that’s what I get for having an open mind, on a bounce.
    plan the trade, trade the plan.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    forced short covering. Someone was planning to never pay it back.

  • ridingwaves

    naked short city in that symbol…but it can now run to .33-.38 easily if it wants too….even a dollar if the broker is trying to get it to minimum bid for 10 days….best to buy back at .12 if it retraced to breakout..

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    remember that spike in DRYS last year? this Bio may not apply, but buyer beware!

    https://uploads.disquscdn.com/images/d7c60871d56f07be3e798ea742d69046ffbaf11d6c7f3378e26631f4f31922b1.png

  • ridingwaves

    they actually have a europe approval on their liver cancer product, being used over there but will agree, Bio sector is full of long tails where the big boys unload..

    Scott’s model proves well here, the easy move is over, what next…best to wait for the easy move…If you bought 100K if this at .02 you made some cash…

  • BobbyLow

    With volume like it has today there’s probably no problem getting in or out. But in my limited experience with penny stocks I found the “normal” spread on these things can be very large. So holding a big profit based on the ask can be drastically reduced selling it at the bid. JMHO

  • ridingwaves

    this is the volume move that I like, some selling at .30 now…
    they might have fda approval in wings…if so this will explode..
    this is the sector rotation time to play with bio in volume, I’m getting giddy….there are some “R” nuggets ready to explode via my lens….

  • BobbyLow

    Congrats! Sounds like you caught a good one.

  • ridingwaves

    thanks, more to come in this sector….

  • Tomcat

    I can’t really post anything from work due to firewall, but I am sure you can easily put one up from on stockcharts with the correlation to UUP..

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • http://evilspeculator.com Sir Mole III

    Not valid until AFTER three touches.

  • http://evilspeculator.com Sir Mole III
  • ridingwaves

    CL found that daily candle tail from 11 14 16 and possible support from candle high on 3-18-16, maybe they hit it again in Asia and you have your 42 maybe overshoot….looks ripe

  • Tomcat

    Am completely out of my element with P&F charts, but my analysis back when it was in the 50s, pointed to low/sub 40. I may have even thrown out a number such as $42. Having said, that I didnt follow through with my trading. I think I covered somewhere in the 45-47 range. Played it for a bounce a couple of times. Chump change. I think in 3-5 years, we could see this in the 20s. Arabs, I think are actually playing it smart. Talking from both sides of their mouths, on one side they need to remain firm with their cuts/targets. On the other side, they are increasing their quota. They would love to take this down to where shale goes away forever, and for that I think the price needs to be in the 20s.

  • ridingwaves

    L CEMP

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    what kind of Mickey Mouse Market is this?
    😉
    I don’t see support till 100.

    https://uploads.disquscdn.com/images/e18b044445bb55a1a20b82e7ed29fcb3ded5b407ceb87a8edae634cdfdb25031.png

  • Scott Phillips

    What a chart! That is a truly amazing thing to trade.

  • Yoda

    this chart is eerily similar to your daily temperature variation

  • ridingwaves

    damn, should have put bid in near .22 by the looks of it….

  • http://evilspeculator.com Sir Mole III